state of the world's cities 2012/2013 - United Nations Sustainable ...

From Comparative Advantage to Urban Prosperityparticipation and erodes the relationships between thecitizenry and the level of government closest to them. 7Box 3.1 highlights how decentralization can play a keyrole in the prosperity of cities.While the responsibilities of municipal governmentshave increased following reforms in recent years, many haveno access to the financial resources needed to undertakethese functions. This naturally creates a mismatch betweenresponsibilities and financial resources, and is a majorreason why decentralization has been less than successful incertain countries.National reforms relating to various aspects ofdecentralization – revenue allocation, communityparticipation, local elections, local planning, pro-urbandevelopment strategies – all provide the enablingenvironment for cities to prosper.Box 3.1.1Decentralization and the prosperity of citiesA major benefit of decentralization as it relates to the prosperityof cities is that delivery of essential services such as water,sanitation and waste management, health and education canbe carried out more effectively. Decentralization can makefor better service delivery by providing greater opportunitiesfor community-based groups to lobby for improved services.Proximity to physical demand for a service encourageseffectiveness and promotes a more rational use of resources,while also allowing for closer monitoring by the beneficiarypopulation of projects intended to serve them.The devolution of authority can foster communityparticipation, too. Decentralization can lead to an institutionalframework through which various political, religious, social,ethnic groups and multi-levels including towns and cities, canparticipate in making decisions that will affect them.Decentralized decision-making can provide a betterframework for poverty reduction, so long as it is accompaniedby fiscal devolution of powers to municipal authorities.Decentralization can accelerate economic development throughactive engagement of regional and municipal governmentunits and local enterprises in economic activities. The transferof authority and resources to local units of government andadministration to design and implement programmes providesmore opportunities for local citizens to play a more direct rolein the development process. As catalysts for development andlocal change agents, they can make decisions about location ofservices and determine priorities.Source: UN-Habitat (2012) Decentralization in Iraq: Challenges andSolutions for Federal and Local Governments, Nairobi: UN-HabitatpolicyFor decentralization to strengthen urban authorities’commitment to urban prosperity, it must be backed byfiscal devolution.System that createsequal opportunitiesThe importance of thisfactor is most pronouncedin Arabs States comparedwith other regions. Thisis because Arab Statesare one of the mostegalitarian in terms ofincome distribution in thedeveloping world. This isreflected in an overall (low)Gini coefficient of 0.36,which has been decliningover time. 9 The low degreeof inequality in the regionhas been attributed to astrong, cohesive social system, and the fact that redistributionconstitutes a policy priority in Islamic economies. 10A system that creates equal opportunities for all canuse redistributive policies that give priority to low-incomegroups and areas. In Venezuela, the government has usedredistributive policies to bring significant improvementsto the living standards of the urban poor throughmassive investment in health and education. 11 With theprovision of over 8,000 clinics in the barrios, people areable to access health services 24 hours a day at no cost.Similarly, illiteracy has been eliminated, pupils are nolonger restricted to elementary school, and those with therequired academic qualifications can attend university.Another form of redistribution policy involvesconditional cash transfers. These enhance the humancapital of beneficiaries through transfers which are madepolicypolicy Decentralizationworks wellwhen backed by strongcommitment and supportfrom central government. 8factA system thatguarantees equalopportunities for all isthe third important factorunderlying the prosperity ofcities. The more egalitariana city, the more prosperousit becomes.For a city to be truly prosperous, it must deploysystems that will ensure equal opportunities for all,especially the more vulnerable – the poor, women, children, theelderly, youth and the disabled. A prosperous city is one where theaspirations of all segments of the population are realized. Highlyunequal cities are a ticking time bomb waiting to explode.95